Valeant Pharmaceuticals International (VRX.TO) (VRX.N) said on Monday that it would buy Solta Medical Inc SLTM.O for about $236 million in cash to add products for procedures such as skin rejuvenation, skin tightening and body contouring.
Last month, Solta said it had retained Piper Jaffray as its adviser to explore a possible sale in light of falling profits from its medical equipment business and pressure from activist investor Voce Capital Management LLC.
Valeant's latest deal is consistent with comments by senior executives in October that the drugmaker was seeking small, cash-based acquisitions in the near term, while still interested in a "merger of equals" involving a stock swap.
Shares of the company have nearly doubled in Toronto this year, with much of investors' enthusiasm stoked by its pursuit of profitable acquisitions.
Solta, which Valeant said would immediately add to earnings, looked like a nice addition, RBC analyst Douglas Miehm said in a note.
But Solta may have other suitors, he said, noting "obvious candidates" such as Germany's Merz Pharma Group, Galderma Laboratories and Allergan Inc (AGN.N).
An Allergan spokeswoman declined to comment. Officials at Solta and the other companies could not be immediately reached for comment.
Valeant would acquire all of the outstanding common stock of Solta for $2.92 per share in cash, a 40 percent premium to Friday's closing price. Parties expect the deal to close in the first quarter of 2014.
With the acquisition, Valeant would have "the broadest aesthetic portfolio in the industry," Chief Executive Officer Michael Pearson said in a statement.
Solta shares jumped more than 39 percent to $2.91, just shy of Valeant's offered price, in midday trading.
Valeant stock climbed 2.9 percent to $109.97 in New York and C$116.32 in Toronto.
(Reporting by Euan Rocha in Toronto and Rod Nickel in Winnipeg, Manitoba; Editing by Gerald E. McCormick and Lisa Von Ahn)